BM&FBOVESPA announces the start of the seventh selection process for a depositary institution authorized to issue Unsponsored Level I Brazilian Depositary Receipts (BDR). The winner will be able to issue 10 BDR programs, backed by shares issued by companies with headquarters in the U.S. and which are publicly traded in that country. The depositary institutions interested in taking part in the selection process should send in their proposals by September 19, 2011. The rules for the bidding process are described in the Bid Notice annexed to Circular Letter 040/2011-DP and the winner will be announced on September 26, 2011.
There are currently 30 Unsponsored Level 1 BDR programs available for trading on BM&FBOVESPA, which have Deutsche Bank S.A., Citibank DTVM S.A. and Itaú Unibanco S.A. as their depositary institutions. There are another four lots of ten programs each that shall be presented to the market soon, by Banco Bradesco S.A. (two lots), Citibank DTVM S.A., and by Deutsche Bank S.A..
The Unsponsored Level 1 BDR is a certificate representing stock issued by a foreign-headquartered publicly traded company. It is thus considered a foreign investment from Brazil, in keeping with the definition of CVM Instruction 332/00. The issue and registry of Unsponsored Level 1 BDRs is the responsibility of a depositary institution in Brazil in which none of the companies represented has a stake.
BDRs can be traded by financial institutions, investment funds, portfolio managers and stock consultants authorized by the CVM (the last two in the list are only permitted to invest own capital) and by supplementary private pension plans and individuals and companies with financial investments of over BRL 1 million. Other individual investors (with financial investments of under BRL 1 million) can only participate in this instrument via funds.
